The council liked what the low bidder said it would do with the property more than the developer who offered taxpayers a higher price.

The difference wasn’t much in the context of the city’s overall budget, just $700,000. But it is symbolic of the city’s proclivity to shortchange taxpayers to support its business judgments, particularly regarding downtown.

And there is a track record: The city’s business judgment is terrible.

This decision occurred about the same time as the city finalized the sale of the Sheraton Hotel for $95 million less than it cost to build. And that’s just the beginning of the bill being presented to taxpayers. To get a buyer even at a fire-sale price, the city had to fork over $13 million for repairs and grant a $97 million property tax break.

Convention center expansion was a double con

The hotel was part of a double con the city pulled on taxpayers.

First, the city asked voters to approve a bond to expand the convention center. It was known that there weren’t enough hotel rooms downtown to support the expansion.

Not to worry, purred city officials. If taxpayers pay to expand the convention center, private capital will pour in to build the needed hotel rooms.

Voters approved the bond to expand the convention center. But the private capital never appeared.

So, the city opted to build the hotel itself. Which instantly started losing money.

The second leg of the con occurred at the state capitol. The state will receive additional revenue from the convention center’s expansion, went the city’s pitch. So, the state should chip in and pay for half of the debt service to build the expansion.

I still don’t understand how Phoenix officials persuaded lawmakers, most of whom hail from other locales, to underwrite the convention center expansion gamble. But they did. And now state taxpayers are on the hook through 2043, when the bond is scheduled to be paid off.

Moreover, according to a recent report by the Arizona Auditor General, the gamble isn’t paying off. The state is receiving less in additional revenue than it is paying for its share of the debt service. And that’s after some dodgy calculations about income tax gains the state is receiving. If only firmer sales tax increase estimates are considered, the deal is working out even worse.

A track record of big deals that don't pan out

Phoenix chasing big development deals that don’t pan out isn’t anything new. Decades ago, it condemned a whole city block of ongoing commercial enterprises to make way for a fancy new retail complex called, as I recall, Square One. It never got beyond the blueprints.

And the city condemned a largely Latino neighborhood near Sky Harbor Airport for an industrial park that never even made it to the runway.

Downtown Phoenix is a much nicer place than it was a couple of decades ago. But virtually all of it has been subsidized.

I’m not a fan of manufacturing subsidies. But there is an economic case to be made for them. Manufacturers don’t usually have to be in any particular place. If other places are doling out incentives, an argument can be made that Arizona has to do likewise to compete. I don’t agree with the argument, but it is what the lawyers call a colorable one.

Phoenix hands out subsidies like candy

There is no economic case for subsidizing office and retail space. Without subsidies, the Phoenix metro area will have whatever office and retail space for which there is a demand. For the region, office and retail subsidies are a zero-sum game.

The City of Phoenix hands out subsidies to downtown office and retail developers like candy. And the cost is shifted to statewide taxpayers. The way the state education finance formula works, state taxpayers backfill for whatever commercial property is taken off the tax rolls.

Phoenix has an election for mayor coming up. The status quo in Phoenix is rotting away. But it seems pretty entrenched politically.

Phoenix badly needs a business-minded mayor to shake things up. Such a mayor would rightsize city services to match reliable revenues. And understand that business decisions are best made by those with private capital at risk, not by politicians playing with taxpayer money.